US-based private equity firm I Squared Capital buys significant control of ENTEK, a leading provider in battery manufacturing, to bring back essential battery production in the US.
In a significant move for the energy storage industry, I Squared Capital has agreed to acquire a majority equity interest in ENTEK, a leading global manufacturer of battery separators. The investment, totalling $800 million, will fund the construction of a gigafactory in Terre Haute, Indiana, which will be the first and only facility of its kind in the U.S. to produce wet-process lithium-ion battery separators.
The project is expected to create approximately 763 construction jobs and 635 operations jobs in Terre Haute once operational. The gigafactory, in partnership with Clayco and Brueckner Group, will produce 1.4 billion square meters of wet-process lithium-ion battery separators annually in its first two phases and is designed to expand to 2.1 billion square meters.
The investment is strategically positioned to scale and capture the significant market opportunity for batteries in the U.S., particularly against an uncertain global battery supply chain and a policy environment that prioritizes the onshoring of strategic manufacturing capabilities.
ENTEK's patent-protected wet process method for lithium-ion battery separators is designed to protect workers, communities, and the environment. The company's product will provide a significant advantage to battery manufacturing customers seeking credits under the OBBBA.
Over the last four decades, ENTEK has grown its operations across eight countries. The company has developed and built a resilient, vertically integrated business model based on core capabilities in energy storage, advanced materials, and equipment manufacturing.
Kirkland & Ellis served as legal counsel for I Squared, while Troutman Pepper Locke and Holland & Knight served as ENTEK's legal advisors. William Blair served as the exclusive financial advisor for ENTEK.
The project has secured more than $200 million in 48C advanced manufacturing tax credits for Phase One of the project. It will also be eligible for ongoing 45X production tax credits in Phase Two.
The transaction is expected to close following regulatory approvals. The name of the EPC company involved in the cooperation for the construction of the Gigafactory in Terre Haute, Indiana, is Fluor Corporation.
The investment from I Squared Capital is a testament to ENTEK's position as a global leader in battery separator technology and its commitment to advancing energy storage solutions. The Terre Haute gigafactory is set to play a crucial role in the U.S.'s efforts to secure a reliable, sustainable, and environmentally friendly battery supply chain.
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